Investing in Countries Based on Economic Freedom

The first of our annual screens. In this post I will look at new strategy I am working on to focus on countries with good absolute economic freedom and a positive change in economic freedom.

As a subscriber to Austrian Economics, I believe the best thing for a country’s stock market long-term is to increase the amount of economic freedom. The decrease in government control over new business development, trade and consumer choices generally leads to strong economic growth.

In the below Google Sheet, I have entered in the current Heritage Foundation economic freedom score, the score from 2014 along with the change and the current CAPE ratio,

The countries are then ranked on each and given a score. The total points column shows the cumulative score. Finally, a 200 DMA is calculated with a google sheet formula to determine if the index is currently trending up.

The ranking page shows the cumulative top ten along with the top five for each of the categories.

This is the first year that I’ve used this particular strategy. To implement it, I will be purchasing LEAPS on a few of the top ranked countries in my growth portfolio and investing in the top five, that are trending, in the retirement income portfolios. This article was posted for informational and tracking purposes only and should not be constituted as a recommendation of any security. The author and portfolios he manages own several of the ETFs mentioned.